HMRC enquiries for EBT schemes through SANZAR

[vern19]

Firstly apologies for the long post.

I do not write on here very often, but my recent letter from HMRC has prompted me to say something about the services I have received from Michael Perry.

You wouldn't be Mrs MJP, by any chance

[cojak]

Careful people, this is a professional forum.

I'll remove personal insults...

[StrengthInNumbers]

Good some are getting their monies worth from MJP 's services. I did not engaged him but found the advice pushed towards marketing his services and not completely accurate - many times to make more fearful and employ him.
Anyways each to its own and if you are getting the service worth your money by all means employ him. I wouldn't and would not recommend.

[adiemus]

You wouldn't be Mrs MJP, by any chance

lol Good try Vern but no connection at all with anything else but in the situation I find myself in having used schemes.

[vern19]

lol Good try Vern but no connection at all with anything else but in the situation I find myself in having used schemes.

Glad to read you are getting the situation resolved

[MercladUK]

I don't get it.

You either pay an APN or use the settlement opportunity. You cant cut deals with HMRC.

you know how much your loans are and then calculating how much tax is due is pretty simple.

What can Perry do bar work for you as a PA/secretary and answer HMRC letters?

regards

[StrengthInNumbers]

HMRC enquiries for EBT schemes through SANZAR

Very true. Anyone thinking that anyone can get the liability reduced (i.e. Get a deal with HMRC) is smoking something which I want as well!

[centurian]

Very true. Anyone thinking that anyone can get the liability reduced (i.e. Get a deal with HMRC) is smoking something which I want as well!

Most likely HMRC simply got their calculations wrong, which MJP was able to highlight. Thus he wasn't able to secure a reduction as such - but merely a correction to reflect the "correct" amount.

Whether this is a common enough occurrence and/or highly complicated calculations such that everyone would benefit - no idea.

[webberg]

I don't get it.

You either pay an APN or use the settlement opportunity. You cant cut deals with HMRC.

you know how much your loans are and then calculating how much tax is due is pretty simple.

What can Perry do bar work for you as a PA/secretary and answer HMRC letters?

regards

I'm afraid your statement is incorrect.

The APN is a payment on account. It is NOT the final liability arising from your scheme. The tax may be higher, there will be interest due, possibly penalties.

Do NOT make the mistake of thinking that paying the APN means the whole issue is dealt with.

The settlement opportunity DOES work on a take it or leave it basis. However it reflects HMRC's current view of the situation and that may be wrong. Until a Judge decides what his/her view is, we won't know.

My personal view of the options available to a Judge are as follows.

1. The loan value is net salary. It should be grossed up for tax and NIC and the final liability is around 60% to 70% of the loan value, before interest and penalty.

2. The loan value is gross income and should be subject to tax and NIC. Interest and penalty to be decided.

3. The loan is just that, a loan. There is no immediate liability. In the event that the loan is written off or forgiven, some liability may arise.

4. The loan is a distribution from a trust and the trustee is liable for tax which is a credit for the recipient in scenarios 1,2 or 3 above.

5. The loan is outside the scope of UK tax laws and is a tax "nothing".

I'm sure with a bit of creativity more options are available.

So what does an adviser bring?

A. The generation of options such as those above, based on facts and law
B. An objective assessment of the likely result
C. Advice as to whether to take a settlement or not
D. Advice on legal/tribunal process and cost
E. Guidance and an expert view

As has been said the arithmetic here is simple. Understanding the environment and the likely outcomes is not.

It is a fact that a professional adviser can only advise. The decision is the clients'. That advice might be seen as too cautious, too aggressive, ill informed or brilliant. Very subjective.

The advisers role is not to make problems and liability disappear. It is to understand and recommend. If the result is to make a liability disappear, everybody is happy. If not, that is usually not the fault of the adviser.

I have not met the gentlemen mentioned here and have no particular opinion other than to expect that he meets the standards of his profession.

[LetsGoSailing]

My personal view of the options available to a Judge are as follows.

1. The loan value is net salary. It should be grossed up for tax and NIC and the final liability is around 60% to 70% of the loan value, before interest and penalty.

2. The loan value is gross income and should be subject to tax and NIC. Interest and penalty to be decided.

3. The loan is just that, a loan. There is no immediate liability. In the event that the loan is written off or forgiven, some liability may arise.

4. The loan is a distribution from a trust and the trustee is liable for tax which is a credit for the recipient in scenarios 1,2 or 3 above.

5. The loan is outside the scope of UK tax laws and is a tax "nothing".
.
.

Do you have any stats as to which of these are the norm in terms of HMRC settlement calculations (focusing specifically on 1 and 2 above)?
If one is looking to settle, and option 1 above is an option for HMRC when determining the liability, would it not be in one's interest to have the loan written off first, then inform HMRC, and 'force' them to option 3?
Has anyone used this approach?